With Palestinian Authority subsidies being held back, Jerusalem’s Al-Makassed can’t pay its staff.

Husni Samara is a gynecologist and endoscopic surgeon at Al-Makassed hospital on Jerusalem’s Mount of Olives. Even though he has a family to support and hasn’t been paid in months, he won’t consider lucrative offers from abroad.

“I am probably the only person who can do endoscopic surgery in the Palestinian territory,” Samara told The Media Line. “If I leave then there is no option for these patients. I know I can earn more money abroad but I will dump these patients. I can’t leave them.”

Samara is just one of the 750 doctors, nurses and personnel who have been hanging on at Al-Makassed, committed to treating to Palestinians even as the east Jerusalem hospital sinks deeper and deeper into debt and risks closure.

For over 40 years, this hospital has been one of the premier medical centers for Palestinians, with its state-of-the-art facilities and dedicated staff providing some of the best care available to patients from the West Bank and Gaza Strip. It’s also a center for training doctors and nurses and offers some treatment competitive with Israelis hospitals such as pediatric cardiac surgery.

But all that is under threat of being shut down. Only the blame is not being leveled at Israel, the traditional scapegoat. This time, the hospital has taken the rare step of blaming the Palestinian Authority (PA) for the crisis.

“The Palestinian Authority has failed to pay for the cases referred and as a result the hospital ran into huge debts. We had to borrow tens of millions of dollars from local banks and pay interest, and since we couldn't pay it back, banks are refusing to give us loans anymore,” said a hospital statement.

When interviewed by The Media Line, Arafat Al-Hidmi, chairman of the board of Al-Makassed who co-signed the statement, decidedly toned down his complaint.

“Because of the economic situation and the crisis around us, this has affected us. It is not easy to cover our expenses so easily. That is why we fall into a financial crisis,” Hidmi says. “The payments [from the PA] are due. It’s our money actually. It is not a donation.”

Known formally as the Al-Makassed Islamic Charitable Hospital, it has been in operation since 1968 and has become one of the jewels in the crown of Palestinian health care. It serves Arabs from east Jerusalem, but the bulk of its patients are Palestinians living in the West Bank and Gaza Strip, many of them impoverished and without health insurance, who have been referred by the PA.

“Right now we are suffering because the economic situation in Palestine in general is very hard. People are going through harsh times, economic difficulties and crises so that reflects on us negatively,” says Yehya Rafai, director of public relations at Al-Makassed.

Tens of thousands of people are treated here annually. In 2009, 80,000 cases were seen by the hospital. Because it is located in Jerusalem, where the standard of living and wages for everyone from the surgeons to the guards to the cleaning staff are greater, operational costs are higher.

For example, the PA officially provides NIS 19,000 ($4,960) for open heart surgery. While some hospitals in the West Bank may make a profit from this arrangement, Al-Makassed loses about NIS 7,000 for each such surgery, Rafai says.

As a charitable hospital, most of its equipment, including a newly installed MRI machine, is donated by bodies such as the Islamic Development Bank in Saudi Arabia and donors in Europe, the US and the Gulf states. But it must cover its running costs on its own, something that has become a huge challenge.

In the past, the hospital was supported by Kuwait, which funded it from its health ministry budget. But Kuwait halted the arrangement after PLO leader Yasser Arafat sided with Saddam Hussein during the 1991 Iraqi invasion of the Gulf state.

The hospital has scrambled for funding ever since, and eventually found support from the Palestinian Authority, which was set up in the West Bank and Gaza in 1994 as part of the Oslo peace agreement.

Today some 65% of its patients are referrals from the PA. Until this year, the PA covered some 90% of the bill, but as a charitable hospital even the 10% is often difficult to pay and Al-Makassed ends up swallowing the difference.

Its monthly income is $2.5 million while its running costs are nearly $3.5 million, putting it a million dollars in the hole every month that operations are normal. But this year a financial crisis in the PA has created a dire situation. The PA hasn’t paid the hospital for months and currently owes it nearly NIS 30 million.

Some 15-20% of the cases are from east Jerusalem Arabs who have coverage from Israeli sick funds. Some 15% of patients come independently and the rest from the PA, Rafai said.

Rafai says raising donations from Diaspora Palestinians are difficult to get due to restrictions on fundraising and transferring money abroad in place after 9/11. But he vowed that the hospital wouldn’t shut its doors no matter what happened.

The hospital’s foundations were laid in the 1960s and when Israel captured the eastern part of the city from the Jordanians in 1967 it found an empty shell of a building, which it considered using as either a police station or a wing of the Justice Ministry.

But Palestinians quickly moved into the building and set up a 60-bed hospital. Today it has 250 beds and one of the most sophisticated maternity wards and neonatal centers in the area.

“We are the only fetal-maternal assessment unit in the Palestinian territories. We have the only gynecologic oncologist in the Palestinian territories as well,” says Samara. “I know that these patients have no other solution. They have no other place to go. Even though I am not paid for a month or two or sometimes three months, I still have the moral commitment to these patients because they have no other alternative.”

Rafai says that they have lost just a negligible number of staff due to the financial crisis.

“We don’t have a high turnover in staff,” Rafai says. “Palestinians are loyal to this hospital. They are committed to this hospital. If the salaries are late two months or three months they are patient with us. They can hold it, I hope not forever. They know that this is temporarily a problem, but the problem will be solved hopefully. I am optimistic.”

The PA has recently begun to trickle some funds to Al-Makassed, but it still hasn’t relayed the millions that it owes. A spokesman for the PA Ministry of Health declined to return repeated telephone calls.